The Nation Newspaper

Category: Energy

  • ‘How to achieve sustainable growth in extractive industry’

    ‘How to achieve sustainable growth in extractive industry’

    Unless stakeholders including the private sector and the government engage in transparency and accountability, sustaining economic growth in the extractive industries may be a tall dream.

    The High Commissioner of Canada to Nigeria, Chris Cooter, disclosed this at a seminar on Corporate Social Responsibility (CSR) in the extractive industries in Lagos.

    At the seminar with theme: Sustainability in the extractive industries: Managing your value chain, Cooter noted that the bane of the extractive industries over the years has been the absence of early and open engagement among stakeholders including communities, which are affected by oil, gas and mine operations.

    He said time has come for stakeholders to come together to ensure that most operations in the oil, gas and mining industries are carried out in line and accordance with international best practices and standards.

    Mr Cooter said the era of shrouding the sectors’ activities in secrecy has to be dispensed with if the desired growth is to take place through investments.

    He assured of his country’s desire to support Nigeria in its quest to entrench accountability and transparency in the management and administration of its abundant natural resources by providing the template adopted by his country and other advanced countries for consideration for use.

    Besides, he said Canada is poised to bring more investments to shore up its $3billion worth investment that had already been made in the country. “So far, we have attained a major feat in our business relationship with Nigeria going by the kind of investments that we have brought here. The fact is that trade values have tripled during this period while investment is growing rapidly by the day. We are also expecting that significant new investments will come very soon to increase the $3 billion worth of investment that has been made already,” he said.

    He noted that the business relationship between the countries was expected to grow by the recent launch of the bi-national commission, which was signed in April.

    The High Commissioner said the commission, which focuses on security, economic and critical components of the economy, would provide the framework for adding momentum to the business relationship between the two countries facilitate opportunities, particularly in the extractive industries.

    The General Manager, Policy, Government and Public Affairs (PGPA), Chevron Nigeria Limited, Deji Haastrup, said the sustainance of growth in the extractive industries should not be left alone to private sector as the government and other stakeholders including non-Governmental Organisations (NGOs) have roles to play in ensuring that the huge revenues realised from oil, gas and mining are monitored and channelled into other worthwhile investments.

    He also said the country’s future lies in the diversification of the economy and the encouragement of entrepreneurship among the youth to reduce over dependence on oil.

    He enjoined stakeholders to work together so that the challenges militating against achieving transparency and accountability in the extractive industries, which include lack of respect for rule of law and sanctity of agreements, poverty, corruption and inadequate infrastructure, can be overcome.

  • New Petroleum Industry Bill: An analysis

    New Petroleum Industry Bill: An analysis

    Section 195 states grounds for revocation of licence, ss (1) states that the Minister on recommendation of the Inspectorate may revoke a licence or lease under certain circumstances. The Minister is empowered amongst others to; revoke a licence or lease where it has been obtained or acquired on the basis of false representations or corrupt practices or where it is owned or controlled by a former or present public officer who has obtained the licence or lease through misuse of public office.

    Issues: These are far reaching provisions to check corruption and sharp practices in the industry, They give the Minister total powers to revoke a licence or lease in the circumstances stated there under. However section 196 allows for representations to be made to the Minister following revocation. It appears that the Minister has the final say and that there is no right of appeal from the decision of the Minister. This may lead to abuse of office by the Minister.

    Protected Objects – Sections 198 and 199: Two novel provisions on protected objects are created. They state that compensation is payable where there is damage or injury to a tree or object which has commercial value.

    Environmental quality management – Section 200: Ss (1) provides that “every licensee or lessee engaged in petroleum operations shall within one year of the commencement of this Act or within three months after having been granted the licence or lease, submit an environmental management plan to the Inspectorate for approval. ss(2) states that “the environmental management plan shall contain the licensee’s or lessee’s written environmental policy, objectives and targets and commitment to comply with relevant laws, regulations, guidelines and standards.

    Issues: This is a welcome provision in view of the reckless conduct of some operators in the industry who do not have a vibrant environmental management plan or an effective system for expeditious remediation.

    Financial contribution for remediation of environmental damage – Section 203: Ss (1) states “as a condition for the grant of the said licence or lease and prior to the approval of the environmental management plan by the Inspectorate, every licensee or lessee shall pay the prescribed financial contribution to an environmental remediation fund established by the Inspectorate….”

    Issues: This is a welcome development given its obligatory nature and will ensure early remediation of damage to the environment.

    National Strategic Stock – Section 225: Ss (1) states that “the Agency shall administer and ensure compliance, distribution and storage of the National Strategic Stocks of petroleum products in accordance with regulation set by the Minister on the advice of the Agency.

    Issues: This will enhance security of supply and check scarcity of petroleum products arising from irresponsible conduct of some marketers and agencies.

    Offences and penalties for damage to infrastructure, plant or equipment belonging to a downstream products or gas licensee including but not limited to fittings, meters and equipment – Section 265: It states that any person convicted of intentionally committing an offence is liable to a penalty not exceeding one hundred million naira as well as reimburse the licensee for any petroleum products or gas illegally taken and for any damage to the licensee’s equipment. ss (2) (1) provides that where such a convicted person is unable to pay the penalty or reimburse the licensee, he or she or officer of the company shall be liable to imprisonment for a period of not less than two years and not more than five years…

    Issues: This provision with its stiff penalty will send a clear message to arsonists and other similar minded people who engage in reckless destruction of property.

    Domestic Gas Supply Obligation – Section 269: Ss (1) states: “The Inspectorate shall regulate the sector in accordance with the National Master Plan for Gas (National Gas Master Plan)

    Issues: This provision will ensure government’s continued interventionist approach in the domestic gas market to boost local production. An obligation is placed on holders of PML to produce a certain percentage of gas as part of their operations, the overall effect is increased production of domestic gas which will meet demand for all the strategic sectors especially for power generation, a penalty is prescribed for failure to meet the obligation. This again is in line with international practice.

    Gas Flaring (Prohibition and Punishment): Section 275: It states that natural gas shall not be flared or vented after a date to be prescribed by the Minister … in any oil and gas production operation, block or field, onshore or offshore, or gas facility e.g processing treatment plant with the exception of such permits granted under section 253 (1) (b).

    Issues: The language of the law is total prohibition subject to exceptions with stiff penalties for non compliance, the requirement for a gas utilisation plan will ensure that natural gas which is produced in the course of oil production is utilised or re injected. Oil producing communities are enjoined to report incidents of gas flaring to the Inspectorate. It is expected that these measures will finally end the ugly and illegal practice of gas flaring which has caused extensive damage to the environment. It is suggested that fixed penalties be introduced.

    Compliance with environmental health and safety laws Section 290: Every company engaged in any activities for which a licence, lease or permit is issuable in upstream and downstream sectors of the petroleum industry in Nigeria, to comply with all environmental health and safety laws, regulations, guidelines and directives as may be issued by the Ministry of Environment or the Inspectorate.

    Issues: There is an obligation on all operators to observe and comply with all environmental laws and regulations adopting a precautionary approach. A duty is placed on them to restore the environment as far as is practicable in the event of damage save where such damage is caused by an act of sabotage. The Inspectorate is empowered to determine whether damage is an act of sabotage where there is doubt, however this may not be an easy process given that the resources to monitor operations closely may not always be available leaving a loop hole for operators to attribute every damage especially oil spills to acts of vandalism or sabotage. Section 272 provides for compensation in the event of damage but does not make a clear stipulation on the quantum of damages which again leaves a gap in the law.

    •Ms Obua, a solicitor with over 20 years experience, is from the University of Dundee. She practices in the UK and also a partner at EN&N Legal Practitioners Victoria Island Lagos and can be reached at efuru@ennlawfirm.com/ eobua@hotmail.com

  • DPR seals depots in Apapa

    The Department of Petroleum Resources (DPR) has sealed petroleum products depots in Apapa, Lagos for various offences.

    In a statement by the DPR, Deputy Director, Public Affairs, Mrs Belema Osibodu, the agency said sequel to its recent Annual General Meeting (AGM) held with depot operators and marketers, during which the Department warned that appropriate sanctions would be meted out to enforce compliance, for violations, including the sale of petrol (PMS) above approved prices, it has started action

    “We have commenced the sealing of identified depots. The PMS delivery arms of the under listed depots have been sealed indefinitely by the Department. They include MRS Oil and Gas Limited; Obat Petroleum Limited and Ascon Nigeria Limited.

    “This action was based on credible information received on the depots, which confirmed that they were selling PMS above approved prices.

    “We hereby state that this sanitization exercise by the Department is a continuous one in addition to the ongoing petrol station surveillance nationwide, to ensure compliance with approved prices of PMS.”

    At the AGM, the DPR also warned oil marketers on the construction of filling stations without its approval.

    The DPR decried the rising issue of marketers building new filling stations without seeking the statutory approval from the regulator. “The past year witnessed an upsurge in the number of marketers who began construction of filling stations with an “Approval to Construct,” and then later applied for a waiver from the Department. This is an outright violation of the laws governing the construction of filling stations, and an appropriate penalty will soon be in place for this,” the Department said.

    The agency drew the attention of the marketers to strict compliance with oil and gas industry standards as practised worldwide. On ensuring further application of global standards in local operations, it said the plans are at advanced stages for the implementation of the Trucking Policy, which is envisaged to enhance tanker trucks usage, institute orderliness in trucking activities at the depots, minimise pipeline vandalism, check diversion, theft and adulteration of petroleum products, and enhance road users’ safety, amongst others.

  • Firm introduces gas machines to save cost

    NO proffer solution to the cost of power consumption in the country, Mantrac Nigeria Limited has introduced generators that are powered by gas.

    The generators popularly known as Caterpillar, the company said, would help to reduce the cost of operations and maximise business potential.

    The product is expected to move the oil and gas industry forward by reducing the cost of operation for the end-user

    The firm is the caterpillar dealer for Nigeria whose objective is to provide the highest quality products and services to satisfy the expectations and requirements of valued customers

    The Managing Director of the company, Edmund Martin-Lawson, who spoke during the gas to power seminar in Lagos, said the company was committed to providing electric power solutions to operate businesses at maximum efficiency.

    The company, he said, offers Olympian generators from 10KVA to 220KVA and caterpillar generators from 250KVA to 7000KVA, providing both primary and standby power.

    He said the generators could be used to power offshore oil rigs, mines in remote areas, communities in areas far from utility power grids, hospitals, schools, factories, airports and office buildings.

    According to him, the engines were designed to power trucks, ships and boats, agricultural equipment, construction and mining machines, adding that the company provides turnkey service covering all operational stages, from system design, testing and installation to commissioning, training and long-term maintenance and repair.

    In addition, the company offers Scheduling Oil Sampling (SOS) for all major oil-lubricated systems including engines, transmissions, hydraulic systems and final drives.

    He expressed concern that the government has not done enough to ensure the use of gas in the country, which he said is cheaper than diesel in the long term use.

    “If you buy a generator set that uses diesel to generate power, it is costlier than using gas to produce the same quantity of power and if you use gas you are reducing part of the cost of production of that factory which in the long term should be able to reduce the cost of their products,” he said.

    On the effect of the new product on the operating environment, he stated that emissions from gas powered generator sets are less when compared with diesel powered sets. He, however, noted that every country has its peculiar business risks.

  • Eko Electricity spends N1.6b on network reinforcement

    •Launches energy saving bulbs

    The management of Eko Electricity Distribution Company has spent N1.6 billion to reinforce distribution and transmission facilities within its network.

    The Chief Executive Officer of the company, Mr Oladele Amoda, an engineer, stated this during the company’s quarterly briefing and launch of energy saving bulbs in Lagos. He said the company was celebrating momentum milestone in power delivery, having got numerous commendations from customers.

    He told the customers that the improved power delivery is part of the reason the government had consistently justified the need for a cost-reflective tariff, which will engender an investor-friendly climate.

    Some of the major projects the company earmarked for completion before end of this year include the reinforcement of critical 33KV, 11KV feeders and rehabilitation of distribution substations for effective evacuation and distribution of power to customers within the company’s network.

    Others include the installation of four numbers of 15MVA, 33/11KV power transformers, which would be used to replace and reinforce existing injection substations at Sanya in Orile Business Unit; Keffi in Ikoyi, Islands Business Unit; Ademola in Victoria Islands and LUTH in Mushin Business Unit; installation of 35 numbers of 500KVA, and 33KVA distribution transformers at Lekki Phase 1, Agungi, Ojo, Orile, Surulere, Ibeju, Mushin, Festac, Apapa, Yaba, among others, for relief of overloaded ones and replacement of failed ones.

    The company will also replace some obsolete 33KV and 11KV switchgear in various locations and rehabilitation of the dilapidated and flood prone LUTH 2x15MVA injection substation for effective evacuation of power to Lagos State University Teaching Hospital and immediate community.

    The Niger Delta Power Holding Company which manages the National Integrated Power Project (NIPP) is also building 27 different projects within the company’s network.

    As part of efforts to encourage the customers to imbibe the culture of energy conservation, the management of Eko also launched energy saving bulbs (light emitting diodes) LED.

    Amoda said the company bought 1500 of such bulbs, which would be distributed free of charge to customers to create awareness on the importance using such bulbs. He said the bulb doesn’t generate heat, uses less energy to give more illumination and also lasts at least 25 years.

    He said: “Energy saving bulbs has been around for a couple of years. But they only got popular in 2007 after the Austrian government decided to ban standard bulbs and replace them with energy saving bulbs. The bulb reduces carbon dioxide emissions, and it is environmentally friendly.

    “Energy saving bulbs are said to be five times more efficient than standard bulbs. The LED lighting lasts upward of 60,000 hours before needing replacement. LED light bulbs use about half the wattage of fluorescent lighting, about 6 watts of power as against 14 watts of power for a Compact Fluorescent Light (CFL) light bulb.

    “For a LED bulb’s lifespan, about 340 kilowatt hours of electricity is used. CFL bulbs used over 60,000 hours (6 bulbs) will use around 840 kilowatt hours of electricity. As far as energy efficiency goes, LED light bulbs are about five times more efficient than fluorescent lighting.”

    Amoda said the launch is important because residential customers constitute reasonable number of the customer base. “The residential customers constitute a significant percentage of our customer’s population. Embracing energy efficiency and conservation can therefore make significant impact on system stability and reliability. Energy saving derived from efficient usage and conservation can be diverted to commercial and industrial use.

    “The rising cost of fuel and electricity makes the need to conserve energy every more evident and the growing need to adopt environmental friendly technology and renewable energy.”

  • Seplat boss expresses concern over passage of PIB

    The Managing Director, Seplat Petroleum Development Company Limited, Mr Austin Avuru, has expressed concern over the passage of the Petroleum Industry Bill (PIB) into law.

    He said the bill would either not be passed into law after all or what would be passed would not be functional, which may lead to call for amendments from the day one.

    The development according to analysts, would not only further deepen investment diversion from the country to other countries but would at the same time jeopardize the entire country’s economy.

    Speaking with The Nation during the Petroleum Club Forum, which focused on the PIB, held in Lagos, Avuru regretted that the piece of draft legislation was rather widening the gap between the government and the industry rather than narrowing it, noting that in the end if no concrete consensus was reached on what is acceptable to both parties, it is the industry and the country that would suffer

    He said the discrepancies that existed between the international oil companies (IOCs) and what the government was trying to do have been the major challenge in all of the versions of the PIB. It doesn’t represent what we think it should be, he added.

    He said: “Right from the beginning when we decided for whatever good reason, that we have to go through this complex process of rewriting all existing legislation in the industry and put it into one piece of document, some of us knew from the beginning that it was going to produce more complications than solutions.”

    He said the objectives of both parties were completely different. According to him, while the government wanted more revenue the stakeholders were saying that too many complications had crept into the industry, which the Seplat chief agreed had increased the cost of doing business.

    “The business environment is much less stable than it was 15-17 years ago and that under this circumstance what we are getting out of the industry is just about enough and the government doesn’t want to listen to that. Government wants more, the industry is saying if you want more you are chasing us out of business,” he said.

    On whether the National Assembly would reach a compromise on the issue, Avuru said the government and the industry had failed to narrow their differences before taking a compromise document to the National Assembly adding that most of them took their very divergent views to the National Assembly and by judication what would come out of the house would be difficult to predict.

    “Where the industry and the government agencies including the Nigerian National Petroleum Corporation (NNPC) could not close their gap and reach some compromise at this point what would come out of the National Assembly would be difficult to predict,” adding that the lawmakers may not have the broad training and experience to understand the intricacies of the issues in the industry.

    The Executive Director, Pillar Oil Limited, operator of Umuseti/Igbuku oilfield, Seye Fadahunsi, said that the PIB must put in place the opportunity for small companies to grow from small to midsize companies

    He agreed there was nothing in the draft that said any category of acreage would be reserved for indigenous players. He said there must be some form of encouragement that ensures that what the international oil companies don’t use, the local companies are able to use them to increase the size of the pile.

    He said the IOCs have given out over 100 acreages of twenty nine marginal fields in the history of indigenous operations in Nigeria and had only produced about five percent of total production.

    According to him, most of the licenses that were given to indigenous companies were licenses that the majors didn’t want, adding that the potential of those licenses were not necessarily that grade.

  • WAGPCo may lose $72m to pipeline damage

    The West African Gas Pipeline Company (WAGPCo) may lose about $72 million to a damaged pipeline, which has stalled company’s operation since August 28.

    The Managing Director,. Charles Adeniji, told reporters in Lagos that the development has affected the company’s revenue which he put at between $500,000 and $600,000 daily.

    He however assured that operation may resume before end of the year.

    Considering the daily loss of revenues, the firm’s deficit may hit $72 million before end of the year when the repairs and re-commissioning of the project would take place.

    He said: “The incident impacted our revenue generation. We have not worked since August 28. It also diverted our attention from executing planned projects. For instance, the stakeholders’ forum that aimed at bringing buyers and sellers together to know how to improve market. It halted our market development efforts.

    On the fate of consumers of the company’s product such as Ghana power plant, he said that power plants usually have dual fuel supply system, noting that the management of the power plants can retrofit the machines to use other fuels such as light crude, diesel, among others.

    In his presentation, the WAGPCo chief said the pipeline damage occurred close to the Lome

    lateral and the 20″ main line. He said the Togolese Navy advised that a skirmish between the Navy and a third party vessel had occurred around 0200hrs on that day and the vessel dragged anchor across Anchoring Exclusion Zone and broke the pipeline.

    As a result of the incident, pressure drop was observed in the control and in all the stations and the company shut-in the pipeline system to prevent further loss and impact to the marine environment and made required notifications to key stakeholders- West African Gas Pipeline Authority (WAGPA), Nigerian Gas Company (NGC) directors, World Bank among others and WAGPA – notified sub-regional energy ministers, he noted.

    He said: “WAPCo will work towards getting back operations as soon as possible. Will notify media as we progress the repair. We discovered that the concrete coating of the pipeline had been cracked.

    “We have set up the Operations Task Force to develop and execute the pipeline repair project and have met every day since August 28, 2012. We have also hired a vessel – the MT Contender – to survey the seabed looking for damaged joints of the pipeline, which commenced since September 6, 2012.

    “Identified observable concrete cracking about 10 nautical miles west of the Lome T-junction- 0028hrs/ September 7, 2012 and damage was identified at coordinate- 05degrees  57,39 N& 001 degree 18,19E. We also discovered that the pipeline had been broken into two parts.

    “Saturation divers, clearly identified a clean break of the 20” main line at the damage location by 1700hrs on 7 September 2012. The 20″ pipe had been severed into two parts. The east severed end had been moved/ dragged 10 metres off the original position. The west end had been dragged 15 m.

    “For completeness the Contender was instructed to survey 2km west and east of the damaged point (of severance). No further damages had been found. Divers reported six sections of the main pipeline damaged and are consequently recommended to be replaced”

    He said the management has commenced pipeline repairs and that divers have removed the damaged pipe joints. He said that each joint was cut and set aside and would be lifted up unto the construction barge for disposal, while the remaining pipe ends have been aligned back to their original positions.

    He said they are preparing the end of the pipe, to receive replacement fabricated pipe spool and construction barge has been hired since September 24, 2012, which is equipped with crane, welders, pipe and machines and six pipe joints loaded on the barge.

    He said: “After repairs, we will re-commission the WAGP pipeline, remove water and debris in the line because sea water entered the line when broken and de-pressurised.

    “Line scraper, called “pigs” will be inserted into and launched at one end of the line to remove water which will be received at the other end. Pigs will be run several times to ensure that the line is clean. Dry the line and then introduce gas.”

  • Investors promise $150m on alternative energy in Ogun

    At least 10 investors including foreign and indigenous companies have committed to investing about $150 million in alternative energy in Ogun State.

    The Special Adviser to Governor on Energy, Chief Taiwo Fagbemi, disclosed this during a press conference in Abeokuta to announce the 2012 Nigeria Alternative Energy Expo (NAEE), which will be hosted by the Ogun State Government from October 29 to 31 at the June 12 Cultural Centre in Abeokuta, the state capital.

    He said the reason Governor Ibikunle Amosun approved the hosting of the expo, is to bring in activities that would improve the energy sector of Ogun State adding that all the states and 774 local governments in the country would be invited. “It will not be a talk show. It will be a practical transformation event as the exhibitors will showcase their expertise in the state,” he added.

    He also said the government would carry out an energy audit of the state to determine the state’s energy policy.

    On the quantum of energy the investors eye to generate through alternative energy, Fagbemi said that would be determined after the expo, when the state has signed memorandum of understanding (MoU) with the investors, and know what the investors would be able to do within a given period.

    He said the event would offer a platform for all stakeholders to network and transfer knowledge and skills; raise awareness and educate the public about climate change in Nigeria and Ogun State in particular and specifically highlight Governor Ibikunle Amosun’s five cardinal point initiatives in the area of rural and infrastructural developments; showcase local and international initiatives and technologies that are at the forefront of renewable energy technology and climate change resilience; and bridge the gap between investors and renewable energy project development in Ogun State and Nigeria, among others.

    Fagbemi said: “As at today, we have 10 confirmed exhibitors. The expo is key to help mobilise foreign investment in energy sector. Between our confirmed exhibitors, they are having more than $100 million to $150 million to be invested in the state. These include the commitment of PAX of South Africa and Katika Energy Limited of Germany and Nigeria. The consortium has operations in London, United States, Germany, China, Nigeria and South Africa where massive campaigns have been mounted with road-shows to showcase Nigeria’s rising image.

    “The Nigerian Alternative Energy Expo is designed to enable participants stay abreast of developments and highlight issues affecting the energy industry and further provide strategies, technologies and policies covering the wind, solar, biofuel, hydrocarbon, geothermal, ocean/tidal/ wave, agriculture, environment, finance and hydrogen in Nigeria. We believe there is no other better time to be part of this exciting moment that Nigerian government has pledged to deliver uninterrupted power through alternative energy.

    “Nigerian National Petroleum Corporation (NNPC), the National Science, Technology and Infrastructure (NASENI) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have given endorsement to be partners in the event.”

    Fagbemi said by leading the way in planning for alternative power solutions, the state increases its power threshold and guarantees rural electrification.

    Besides, the NAEE 2012, will feature the maiden edition of Nigeria Green Awards, which would be presented in both individual and corporate categories. Winners according to the organisers will be nominated on the basis of individual and corporate commitment to eco-system initiative, resilience in the investment in clean and renewable energy sources. The organisers of the event also urged visiting delegates to take part in tour of the state during the expo to see the untapped opportunities for investment and development across the state.

  • Masters Energy builds $10m fabrication yard

    The management of Masters Energy Limited said the company is building a $10 million fabrication yard at its multi-billion dollar energy city in Port Harcourt, Rivers State.

    The Managing Director of the company, Mr Uche Uduah, who disclosed this when the members of House of Representative Committee on Petroleum Resources (Downstream) paid a visit to the yard and energy city as part of their oversight function, also noted that the fabrication yard would be ready in January 2013.

    It was also gathered that the fabrication unit of the energy city, which is geared at sustaining the company’s edge above its competitors would be operating at full capacity when it finally takes off.

    The fabrication yard is located inside the multi-sbillion dollar energy city of the company.

    Uduah said: “Masters Energy is always thinking ahead. We do not wait for government policies. We have already started a fabrication unit which will be ready by January 2013. We want to see how we can play successfully with logistics and fabrication.”

    He said the company is also planning to build its own private refinery when government fully deregulates the downstream sector and put in place policies that would promote and encourage private investments. He noted that until there are privately owned refineries in the country, the problem of scarcity will not be solved.

    He said: “There should be 100 percent deregulation to allow for a level playing ground for all operators, even if it is a guided deregulation. I do not want government’s subsidy of any kind. If you buy you sell, if I buy I sell.

    “Government should create policies that will encourage private investment. Look at what happened in Akwa Ibom, the Amakpe Refinery. Somebody started that project and nobody could come out to say let’s encourage him. What if he had spent all his life savings on that project, the whole thing would have gone down the drain?

    “We at Masters Energy are ready to build a refinery. We have over 143 hectares of land to do that but there should be a policy that will support private investment.”

    On the challenges his company is currently facing, Uduah said: “Before now, it was adequate allocation and now it is funding. Nobody wants to give you money. The banks are also afraid because the Central Bank’s policies, so nobody wants to invest.

    “No matter how you look at it, premium motor spirit (PMS) constitutes 80 percent of our business. If I have PMS here you will see over 500 trucks here waiting to load. Despite the nature of the road this place is closer to the north. Trucks will come. The issue is that everybody is scared even the foreign investors. Nobody is sure that if they give you money that they would be able to get back their investment or if they give you products, they will get their money.”

    Uduah also denied insinuations of the existence of a cartel in the industry, which is said to be responsible for the current scarcity being experienced across the country, adding that if indeed there is a cartel, they would have been able to come together to stop the subsidy investigation.

    “There is nothing like cartel, the business is about turnovers. Any marketer that has products must sell because the more turnovers you make the more money. What has been happening is NNPC’s supply and swap. Let them give you the analysis of what is the actual value since the beginning of the year,” he said.

    He said he believes in working with Nigerians. “I work with Nigerians because I believe that the problem of Nigeria can only be solved by Nigerians,”he said.

    The Chairman of the committee, Hon. Dakuku Peterside, commended the Masters Energy for the project and noted that when the energy city is completed, it would be the biggest oil and gas facility in the who Africa

  • Aba’s $500m power station begins operation Feb.

    Aba’s $500m power station begins operation Feb.

    Barring unforeseen circumstances, the Aba Power Station, the first private indigenous power project in the country, would start operation by February 2013, it was learnt.

    The project, which is the sole initiative of Geometric Power Limited, would provide a reliable electricity supply to Aba, the commercial capital of Abia State and its environs.

    The project, which is being handled by ABB Powerlines, Group Five of South Africa, Pauwels of Belgium, General Electric and Oilserv Nigeria Limited, is planned in three phases and when completed would be generating and distributing about 1000 megawatts (MW) of electricity.

    A gas pipeline, which would be connected to the power plant for supply of gas, is also being constructed.

    Speaking with reporters during a facility tour of the power plant, the Project Manager, Group Five of South Africa, the power plant contractor, Johan Riekert and the Project Manager, Pauwels/EMO Africa in charge of distribution substations, Slobodan Bajkovic and his counterpart in ABB/GEC Powerlines in charge of power lines and poles, said: “We are here to show you phase one of this project. When we came here, Aba had three sub-stations of two numbers of 15MVA transmission transformers. The maximum Aba could get would never have adequately gotten to the people because it did not have enough evacuation structure.

    “We had to build four additional sub-stations to bring it to seven. Power lines were dilapidated and we had to rebuild them. We had to introduce a different kind of poles, the Steel Tubular Poles (STP). It is of two different kinds. The new sub-stations are located at Osisioma, Ogbor Hill, Factory Road and Port Harcourt Road. We are going to refurbish the Power Holding Company of Nigeria (PHCN) sub-station in Omode.

    Riekert said: “Phase one will generate 140mw and Phase one B will generate 47mw. It is just an additional unit of the same type. Phase two will generate 540mw in Alaojie and Phase three will come later and this is expected to bring it up to 1000mw.

    “Each one is a project on its own. The power plant has its own sub-station, which is to transmit power from there. When the project is completed in February 2013, Aba would have a reliable power supply.

    “Phase two is intended to provide assurance that even when the city develops bigger; its power would still be reliable. It will be linked to the national grid, while Phase one is for Aba alone.

    “Aba has been concessioned to this project. The concession is equivalent to privatisation.The customers are within the ring set.”

    On the challenges, he said: “The challenges are not on the project itself. We have gone through the big hurdles. We were doing construction when the financial crises came. We would have abandoned the project if it was not a well conceived one. It is 100 percent private driven project and it is just to show that private investors can provide power and relieve the government of some of its burdens.”

    He explained that Geometric Power is the holding company and that Aba Geometric and APL Electric have been licensed to generate and distribute power.“We have been licensed to generate and distribute power; Aba Geometric is the generating company while APL is the distributing company. It is the first of its kind,” he added.

    On the Geometric Power issue with Assets Management Company of Nigeria (AMCON), he said: “I think people misunderstand what AMCON does. They handle two kinds of debt, the bad debt which is known as toxic debt, which they take over. While it recovers the debt, it allows the bank to operate the company. The second is the performing debt. A bank has an obligable limit. AMCON can take over and reduce it when the bank has passed that limit. Geometric’s debt is a performing debt; it is a percentage of that debt of the bank that was taken.”